Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2013
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Contents
Review of Operations
Directors‟ Report
Auditor‟s Independence Declaration
Corporate Governance Statement
Statement of Financial Position
Statement of Profit or Loss and Other Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Consolidated Financial Statements
1. Nature of Operations
2. General Information and Statement of Compliance
3. Changes in Accounting Policies
4. Summary of Accounting Policies
5. Revenue
6. Segment Reporting
7. Other Receivables
8. Cash and Cash Equivalents
9. Equity and Dividends
10. Employee Remuneration
11. Trade and Other Payables
12. Plant and Equipment
13. Exploration and Evaluation
14. Intangibles
15. Income Tax Expense
16. Auditor Remuneration
17. Earnings per Share
18. Reconciliation of Cash Flows from Operating Activities
19. Related Party Transactions
20. Contingent Assets and Contingent Liabilities
21. Commitments
22. Financial Instrument Risk
23. Capital Risk Management
24. Post-Reporting Date Events
25. Parent Entity Information
26. Authorisation of Financial Statements
Directors‟ Declaration
Independent Auditor‟s Report
ASX Additional Information
Corporate Directory
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For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Review of Operations
3
Highlights
The year ended 30 June 2013 saw a major change in the direction of MRG, with the acquisition in the second half of
the financial year of Sasak Resources Australia Pty Ltd ('Sasak Resources'). The finalisation of this event marks a
change in direction for the Group, with a focus on the application of data mining technology to the mineral
exploration process. The acquisition comprised three separate components:
Gaining a large landholding of over 2,000 km2 in the East Yilgarn Craton of Western Australia and three Iron
Oxide Copper Gold exploration licences in the Mount Isa Block of western Queensland.
Access to proprietary data mining technology developed by the principals of Sasak Resources, through a
Technical Services Agreement;
A Project Generation Agreement.
The Technical Services Agreement with Sasak Technical Services Pty Ltd ('Sasak Technical') and Project Generation
Agreement with Sasak Minerals Pty Ltd ('Sasak Minerals') run for a period of 2 years, with the option of extension,
commencing 1 July 2013.
A technical and commercial review of all MRG's projects is currently underway, with the review of Collie South &
Kalgoorlie East projects already complete.
Projects
The financial year ended 30 June 2013 saw further advancement of MRG's exploration at Kalgoorlie East and Collie
South projects. Since the Company's initial listing in June 2011 the Company has actively pursued exploration with
the major focus being on Kalgoorlie East. This project has the outstanding characteristic of being located between
the Kalgoorlie Consolidated Gold Mines‟ Gold Super Pit and MacPherson Resources Ltd‟s Silver Super Pit. It is
hosted in the Golden Ridge tectonic zone which already hosts a number of mines and major deposits. MRG also
achieved initial technical success on our Collie South project, with coal being discovered at shallow depths at two of
the three areas drilled. The second half of the year was largely spent on negotiations and due diligence associated
with the Sasak Resources acquisition. This review has already identified new targets on the Kalgoorlie East and
Xanadu projects.
Kalgoorlie East Project (Gold, Silver, Nickel & Base Metals)
The Kalgoorlie East project is located approximately 8km east of Kalgoorlie in the Eastern Goldfields of WA, and
consists of 15 prospecting licences covering an area of 17km². This region is highly prospective and hosts a number
of large gold and silver deposits, including the Kalgoorlie Super Pit (>50 million oz Au) 7km to the west, Kanowna
Belle (>5 million oz Au) 12kms to the north and Nimbus (>23 million oz Ag-eq.) 2kms to the south east.
The project area consists of a structurally complex assemblage of Archean ultramafic, mafic and felsic volcanic rocks
with associated sediments and cherts, intruded by a series of younger dolerite dykes and felsic porphyries, together
known as the Golden Ridge Belt.
Indications of a number of styles of mineralisation have been identified on the project, including Kambalda style
nickel sulphide, shear hosted gold, Nimbus style silver mineralisation and disseminated base metal mineralisation. In
addition, the Boorara type mineralisation, may also be present. At Boorara, <1km east, mineralisation is controlled
by the intersection of a north east trending fault with the major regional NNW trending faults. This NE fault and
others of a similar orientation, extend into the MRG tenements. The spatial association between these NE faults
and the MRG gold in soil anomalies will be tested during the coming year.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
4
Initially, three nickel areas are being assessed in detail. The main target is an area where earlier MRG Aircore drilling
returned 5m @ 1% nickel, 0.2% cobalt & 0.33% chromium from 5m down hole. While this intercept is within
weathered rocks, subsequent detailed re - analysis indicates that it derived from primary nickel sulphides, rather than
being a lateritic accumulation. Another anomaly to the south shows coherent high nickel soil anomalism up to 3,966
ppm Ni.
Drilling is planned to commence in Q4 2013 after completion of an EM survey. For the gold targets, the Company
will investigate the geochemical and structural relationships of the NE trending faults to elucidate the geological
controls on gold mineralisation.
Xanadu Project (Gold)
MRG acquired the Xanadu project along with four other projects for its Initial Public Offering in April 2011. We
have been compiling and reviewing data on this project while prioritising Kalgoorlie East and Collie South projects.
Sasak Technology is currently applying their data mining technology to the extensive database to assist in targeting
additional areas gold mineralisation away from the known prospects.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
5
Xanadu is located approximately 38km southeast of Paraburdoo in the Pilbara Region of WA and is comprised of 14
prospecting licences covering 27km2. Geologically, it shares many characteristics of Northern Star Resources Ltd's
adjacent Ashburton Project (Mount Olympus), which lies 5km the northwest and hosts over 1 million oz of gold.
The project covers a northwest trending zone of Proterozoic clastic sediments and carbonates on the southern
margin of the Ashburton Basin and is prospective for Carlin-style gold deposits. Mineralisation in the Ashburton
Basin is focused along a 200km long corridor on the margins of the Nanjilgardy Fault, which is a major deep seated
bounding structure between the Basin and the Pilbara Craton. This fault is the likely conduit for gold bearing fluids
responsible for mineralisation found at Xanadu and Mount Olympus, as well as the Paulsen's mine and Belvedere
deposits to the northwest.
MRG's tenements cover a 12km strike length along the highly prospective corridor that follows the Nanjilgardy
Fault. The region is generally lightly explored. However, there is greater than 25,000m of drilling on the licence area
since 1993, the bulk of which was carried out by Newcrest Mining from 1999 to 2006. Several small (non-JORC)
gold resource estimates were made by previous explorers. MRG continues with ongoing database consolidation and
validation and has identified four priority targets where drilling is expected to commence later in the year. The
exploration program is expected to focus on the Claudius and Amphitheatre prospects, followed by the Big Bend and
Stynes prospects, along with other areas identified during the current technical review.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
6
East Yilgarn Project (Gold)
The East Yilgarn Project comprises a large land holding, covering over 2,000 km2 of greenstone terrain acquired
from Sasak Resources in June 2013. The Sasak Technical predictive modelling indicates that this greenstone belt has
a potential to host a new 25Moz gold province. Gold Road Resources Ltd, in similar geological terrain 100kms to
the southwest, has already discovered >1 million oz Au and has successfully joint ventured the southern part of the
project with major Japanese corporation, Sumitomo Metal Mining Ltd.
MRG acquired 14 granted exploration licences and a further two pending exploration licences in the East Yilgarn
greenstone belt covering more than 2,000km2. The East Yilgarn project is located just to the north of Great Central
Road, approximately 275km northeast of Laverton.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
7
The geology of the province is poorly known, since Cainozoic superficial units up to 30m thick cover approximately
90 percent of the area. Outcrops in the remaining areas consist of either flat-lying Phanerozoic rocks and easterly-
dipping Proterozoic quartzites, forming the western margin of the Officer Basin, or Proterozoic rocks dipping gently
north at the eastern end of the Nabberu Basin.
The main exploration target is Archaean Greenstone-hosted gold deposits, such as those at the Golden Mile around
Kalgoorlie, or recent discoveries as made in neighbouring greenstone terrains by Gold Road Resources Ltd.
In early July 2013, MRG commissioned an airborne geophysical survey over the East Yilgarn greenstone tenements.
Results from the Survey are now to hand and the data will be used to define 6 to 8 priority targets areas for more
detailed exploration and analysis.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
8
Queensland IOCG Projects - (Copper/Gold)
With the purchase of Sasak Resources, MRG acquired three tenements in the Mt. Isa Block, a large geological
province in western Queensland. These tenements include a granted licence known as Davenport Downs (37.8km2)
and pending applications at Squirrel Hill (6.3km2) and Pulchera (129.2km2). Sasak Technical‟s analysis has identified
these areas as having the potential for Iron Oxide, Copper and Gold deposits with similar characteristics to known
deposits, such as the Ernst Henry deposit (170 million tonne, at 1.7% Copper and 0.54% Gold) located in the
northern part of the Mount Isa Block.
In addition to the technical review, compilation of previous data has commenced as precursor to on ground
exploration planned for Q1 2014.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
9
Fraser Range Project (Gold)
The Fraser Range project has a total area of approximately 150km2, located 100km south east of Norseman, WA.
The project consists of 5 pending exploration licences, of which two were applied for in March 2012 and an
additional three in March 2013. The primary target is Tropicana style gold mineralisation.
The geology of the Albany Fraser Orogenic Province, of which the MRG‟s Fraser Range project is part, is poorly
known, since younger sediments cover approximately 90 percent of the area. Based on limited outcrop and
geophysical interpretation, the project lies within a complex of strongly deformed Proterozoic high-grade gneissic
rocks.
The focus for MRG has been an ancient collision zone located between the Yilgarn Craton and the Albany-Fraser
Orogen which hosts AngloGold Ashanti‟s +5M oz Tropicana Gold Mine, located 400km to the northeast and Sirius
Resources Ltd's Nova Ni-Cu-Co deposit, located 80km the northeast. Prior to these discoveries the area was not
thought to be overly prospective.
Assessment of the Fraser Range licence applications has now been completed by the Department of Minerals and
Petroleum, however as part of the licences lie within the Dundas Nature Reserve, final grant is awaiting
environmental approval from the Department of Environment and Conservation. All open file and geophysical data
is currently being scrutinized for favourable structural positions and alteration zones, with selected areas to be
subjected to a targeted geochemical sampling program upon final licence approval.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
10
Loongana (Nickel - Platinum)
The Loongana project area, also acquired from Sasak Resources, covers part of an interpreted large layered mafic-
ultramafic complex buried under cover. MRG is to test this complex for Platinum mineralisation, either as
strataform or stratabound reef within the complex, or associated with disseminated to massive Nickel - Copper
sulphides in the margins of the complex.
The Loongana exploration licence covers an area of 220km2 and also lies within the Albany-Fraser Orogen, which is
covered by younger sedimentary rocks. The project is approximately 480km east of Kalgoorlie WA, on the Nullabor
Plain and 50km north of the Trans Australia Railway.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
11
The project area covers a large coincident magnetic and gravity anomaly believed to be a layered mafic-ultramafic
intrusion within the Proterozoic Albany-Fraser Complex. The main target zone is 45km long, and up to 15km wide
at its widest point. The main exploration focus is a strong geophysical target below the Cainozoic sedimentary rocks
of the Eucla Basin. The magnetic and gravity signatures interpreted by Sasak Technical suggest the presence of Pt-
Ni-Cu mineralisation associated with mafic/ultramafic lithologies.
This exploration licence was recently granted and MRG will now undertake further geophysical analysis as precursor
to a deep drilling program.
Braemore Project (Gold & Base Metals)
The Braemore project lies 8 kilometres north east of Leonora WA in the Eastern Goldfield, within the regionally
significant north north-westerly trending Keith-Kilkenny Tectonic Zone.
As part of the current Technical Services Agreement, MRG will apply the predictive analytical technology to the
exploration data collected to date to generate exploration targets. Previous work by MRG has not identified any
significant results. However, Braemore is to be retained until completion of the review.
Collie South Project (Thermal Coal)
Following the Sasak Resources acquisition the Company commenced a technical and commercial review of the
existing exploration projects and determined to withdraw from the Joint Venture on the Collie South Coal project.
While exploration by MRG did reveal the presence of the coal within the licence, the Board has determined that
given the state of the thermal coal market and the number of other of highly prospective targets in MRG‟s portfolio,
shareholders are best served by returning the licence to the original holder. Accordingly, MRG withdrew from the
Joint Venture in July 2013.
ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2013
MRG has withdrawn from the Collie South Joint Venture in July 2013.
Mr Christopher Gregory was appointed to the Board as a Non-Executive Director on 12 August 2013.
The Loongana exploration licence was granted in August 2013.
An Airborne Geophysical Survey was completed in August 2013 for East Yilgarn.
An Electro Magnetic Survey commenced in September 2013 on Kalgoorlie East.
A Program of Works has been approved for Xanadu.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Directors‟ Report
12
The Directors of MRG Metals Ltd present their Report together with the financial statements of the consolidated
entity, being MRG Metals Ltd („MRG‟ or „the Company‟) and its controlled entities, MRG Metals (Australia) Pty Ltd
and MRG Metals (Exploration) Pty Ltd („the Group‟) for the year ended 30 June 2013 and the Independent Audit
Report thereon.
Director details
The following persons were directors of MRG Metals Ltd during or since the end of the financial year.
Mr Keith Weston
BSc Geology (hons), MAusIMM
Managing Director & Chief Executive Officer since 07/01/2013
Director since 07/01/2013
Keith is a Geologist with over 26 years experience in the Minerals Industry throughout Australia and Latin America.
In recent times, Mr Weston was the inaugural Managing Director and Chief Executive Officer of Metminco Ltd
(ASX Code: MNC)(“Metminco”). He held the position prior to ASX Listing on 1 October 2007 until 31 October
2009. During this time he was instrumental in the successful takeover of Hampton Mining Ltd and subsequent
exploration by the merged entity in South America. Principally, from November 2009 to December 2011, he was
Chief Geologist for Peru of Metminco, where he was involved in advancing the world class Los Calatos copper
deposit. Since January 2012, Keith was engaged as a consulting Geologist for MRG.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
100,000 shares
Interest in options:
None
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
13
Mr Andrew Van Der Zwan
BE Chemical Engineering (hons)
Independent Non Executive Director since 07/01/2013
Managing Director & Chief Executive Officer 01/07/2012 to 07/01/2013
Director since 14/02/2011
Andrew has 27 years engineering and commercial experience, both local and international. He was a Non Executive
Director of Gulfx Ltd for 11 years and was employed in various senior positions within the worldwide operations of
Exxon Mobil for 17 years.
Other current directorships:
Argo Exploration Ltd (ASX: AXT) since 02/07/2013
Previous directorships (last 3 years):
None
Interests in shares:
2,280,000 shares
Interest in options:
1,080,000 options
Mr Albert Pietrzak
BE Mechanical Engineering
Independent Non-Executive Director
Independent Chairman
Director since incorporation 24/01/2011
Albert has 42 years engineering and commercial experience. He was Managing Director of an engineering company
for 33 years. He is a fully qualified IFR pilot, an engineering consultant and an investor.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
2,180,000 shares
Interest in options:
1,065,000 options
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Mr Shane Turner
CA, Bachelor of Business
Independent Non-Executive Director
Director since incorporation 24/01/2011
14
Shane is a Chartered Accountant and has 25 years financial and accounting experience. He has been employed with
KPMG, a large regional public accounting practice, operated his own public accounting practice and now is
employed with RSM Bird Cameron. He was a Non Executive Director and Company Secretary for Metminco for 2
years.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
1,531,600 shares
Interest in options:
735,000 options
Mr Christopher Gregory
BSc Geology, MAusIMM, MAIG, FSEG, MAICD
Independent Non-Executive Director since 12/08/2013
Director since 12/08/2013
Chris has extensive global minerals industry experience over 30 years, at both technical and executive levels. Career
foundation of 22 years in the Asia-Pacific region with Rio Tinto. Currently consultant GM Australasia, Corporate
Development & Exploration, Mandalay Resources (TSX:MND).
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
12,249,900 shares
Interest in options:
None
Company secretary
Shane Turner is a Chartered Accountant and the Group Chief Financial Officer. Shane has held senior positions
with a number of professional accounting firms and has a degree in Business. Shane has previously held the role of
company secretary for Metminco for 2 years. He has been the company secretary of MRG since incorporation on
24/01/2011.
Principal activities
During the period, the principal activities of entities within the Group were exploration and development of gold,
base metals and other commodities within Australia.
There have been no significant changes in the nature of these activities during the period.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
15
Review of operations and financial results
The operating result of the Group for the year ended was a loss of $1,070,853 (2012 loss $764,056). Refer detailed
Review of Operations that follows this report.
Earnings per share (1.21) cents (2012 (0.87) cents).
Further information on the detailed operations of the Group during the year are included in the Review of
Operations Report.
Significant changes in the state of affairs
During the year, the following changes occurred within the Group:
Subsidiary acquisition
On 26 June 2013, Shareholders approved at a General Meeting to acquire 100% of the issued capital of Sasak
Resources.
Tenement Acquisitions
As part of the acquisition of Sasak Resources, tenements and tenement applications were acquired in East
Yilgarn, WA; Loongana, WA and Mount Isa, QLD.
In March 2013, applications were lodged for three further tenements at Fraser Range.
Dividends
There were no dividends declared or paid during the financial period.
Events arising since the end of the reporting period
Since the end of the year no further significant events have occurred other than those noted in the Review of
Operations Report.
Likely developments
Information on likely developments in the Group‟s operations and the expected results have not been included in
this report because the directors believe it would likely result in unreasonable prejudice to the Group.
Directors’ meetings
The number of meetings of directors held during the period and the number of meetings attended by each director
were as follows:
Name
Board meetings
Mr A Van Der Zwan
Mr A Pietrzak
Mr S Turner
Mr K Weston
A
13
13
13
8
B
12
12
13
8
Where:
A is the number of meetings the Director was entitled to attend
B is the number of meetings the Director attended
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
16
Remuneration Report (audited)
The Directors of MRG Metals Ltd („the Group‟) present the Remuneration Report prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001.
The remuneration report is set out under the following main headings:
a. Principles used to determine the nature and amount of remuneration
b. Details of remuneration
c. Service agreements
d. Share-based remuneration
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group‟s executive strategy and supporting incentive programs and frameworks are:
To align rewards to business outcomes that deliver value to shareholders;
To drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
To ensure remuneration is competitive in the relevant employment market place to support the attraction,
motivation and retention of executive talent.
MRG Metals Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board, in accordance with its charter as approved by the Board, is responsible for determining and reviewing
compensation arrangements for the directors and the executive team.
The remuneration structure that has been adopted by the Group consists of the following components:
Fixed remuneration being annual salary; and
Superannuation to meet statutory obligations.
The Board assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
The payment of bonuses, share options and other incentive payments are reviewed by the Board annually as part of
the review of executive. All bonuses, options and incentives must be linked to pre-determined performance criteria.
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Consolidated Financial Statements
30 June 2013
17
(b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each key management personnel („KMP‟) of MRG Metals Ltd are shown in the table
below. Mr. A Van Der Zwan was replaced as Managing director on 7 January 2013 by Mr K Weston. Mr A Van Der Zwan became a Non-executive director
from 7 January 2013.
Director and other Key Management Personnel Remuneration
Short term employee benefits
Name
Executive director
Mr A Van Der Zwan
Non-executive directors
Mr A Pietrzak
Mr S Turner
Mr N Fammartino
Cash salary
and fees ($)
Cash bonus
($)
Non-
monetary
benefits ($)
150,000
-
50,000
86,000
-
-
-
1,000
2012 Total
286,000
1,000
Executive director
Mr K Weston
Mr A Van Der Zwan
Non-executive directors
Mr A Pietrzak
Mr S Turner
Mr A Van Der Zwan
2013 Total
58,077
88,847
50,000
96,891
19,359
313,174
-
-
-
-
-
-
Post-
employment
benefits
Long-term
benefits
Termination
benefits
Share-based
payments
Superannuation
($)
Long-term
bonus ($)
Termination
payments ($)
Options ($)
Total ($)
% of
remuneration
that is
performance
based
-
-
-
-
-
-
-
-
-
-
-
13,500
4,500
7,740
25,740
5,227
6,510
4,500
8,640
2,242
27,119
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
163,500
54,500
93,740
1,000
312,740
63,304
95,357
54,500
105,531
21,601
340,293
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
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Consolidated Financial Statements
30 June 2013
18
(c) Service agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel
are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out
below:
Name
Mr K Weston
Mr A Van Der Zwan
Mr A Pietrzak
Mr S Turner - Director
Mr S Turner - Secretary
Base salary
120,000
40,000
50,000
50,000
50,000
Term of agreement
One Year
Rotation per Corporations Act 2001 Nil
Rotation per Corporations Act 2001 Nil
Rotation per Corporations Act 2001 Nil
Nil
No fixed term
Notice period
One Month
(d) Share based remuneration
During the year, there was no share based remuneration paid or outstanding.
End of audited remuneration report.
Environmental legislation
The Group‟s projects are subject to environmental regulation under laws of the Commonwealth and States and
Territories in Australia, specifically the Group is required to comply with terms of the grant of the tenement and all
directions given to it under those terms of the tenement which it holds. There have been no known breaches of the
tenement conditions, and no such breaches have been notified by any government agency during the period ended
30 June 2013.
Indemnities given and insurance premiums paid to auditors and officers
During the year, MRG Metals Ltd negotiated a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct
involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of the insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnity any current or former officer or auditor of the Group against a liability incurred
as such by an officer or auditor.
Non-audit services
During the previous period, Grant Thornton Audit Pty Ltd, the Group‟s auditors, performed no other services in
addition to their statutory audit duties.
Details of the amounts paid to the auditors of the Group, Grant Thornton Audit Pty Ltd, and its related practices
for audit and non-audit services provided during the year are set out in note 16 to the Financial Statements.
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Consolidated Financial Statements
30 June 2013
19
A copy of the auditor‟s independence declaration as required under s307C of the Corporations Act 2001 is included
on page 20 of this financial report and forms part of this Directors‟ Report.
Proceedings of behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
Signed in accordance with a resolution of the directors.
Albert Pietrzak
Chairman
30 September 2013
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Consolidated Financial Statements
30 June 2013
20
Grant Thornton Audit Pty Ltd
ACN 130 913 594
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of MRG Metals Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of MRG Metals Limited for the year ended 30 June 2013, I declare that, to the best of
my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Brad Taylor
Partner - Audit & Assurance
Melbourne, 30 September 2013
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires.
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related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Corporate Governance Statement
21
This Corporate Governance Statement sets out the extent to which the Company's practices comply with the ASX
Corporate Governance Council's Principles of Good Corporate Governance and Recommendations
(Recommendations). The Recommendations are not mandatory.
ASX Corporate Governance
Council Recommendation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: Companies
should establish functions reserved
to the board and those delegated to
senior executives and disclose those
functions
responsibilities of
MRG policy
Compliance
Complies
Recommendation 1.2: Companies
should disclose the process for
the performance of
evaluating
senior executives
Recommendation 1.3: Companies
should provide
information
indicated in the Guide to reporting
on Principle 1
Principle 2: Structure the board to add value
Recommendation 2.1: A majority
of the board should be independent
directors
the
Recommendation 2.2: The chair
should be an independent director
Recommendation 2.3: The roles
of chair and chief executive officer
should not be exercise by the same
individual
Recommendation 2.4: The board
should
a nomination
committee
establish
Recommendation 2.5: Companies
should disclose the process for
evaluating the performance of the
board, its committees and individual
directors
Group's
The
Corporate
Governance framework includes a
Board Charter, which details the
specific
the
Board and identifies those areas of
senior
authority delegated
executives.
The Board will set performance
criteria to review the performance
of senior management.
to
The Board Charter is available on
the Group's website.
the Group's
Three of
four
directors, being Albert Pietrzak,
Andrew Van Der Zwan and Shane
Turner, are independent directors.
Albert Pietrzak is the Chairman
and is an independent director.
Albert Pietrzak is the Chairman.
Keith Weston
Executive Officer.
the Chief
is
into consideration
The Group does not currently
have a nomination committee.
Board
appointments will be
decided by the Board as a whole,
taking
the
needs of the Group at the relevant
time.
The Company Secretary plays an
integral role in monitoring the
conduct and activities of Board,
ensuring
an
appropriate mix of skills and
experience
reviewing
and
individual director's performance.
The Chief Executive Officer is
the
reviewing
for
responsible
performance of
the Company
Secretary.
the Board has
Complies
Complies
Complies
Complies
Complies
The Board does not
consider it necessary given
the size of the Group's
current operations.
Complies
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
22
the
MRG policy
ASX Corporate Governance
Council Recommendation
Recommendation 2.6: Companies
information
should provide
indicated in the Guide to reporting
on Principle 2
Principle 3: Promote ethical and responsible decision making
Recommendation 3.1: Companies
should establish a code of conduct
and disclose the code or a summary
of the code as to:
This information, where relevant,
the
has been disclosed
Directors‟ Report.
in
Compliance
Complies
Complies
is committed to
prepare
Diversity
and
Board
review
appropriate
policy.
is committed to
prepare
Diversity
and
Board
review
appropriate
policy.
The Board has established a Code
of Conduct as to the practices
necessary to maintain confidence
in the Group's integrity; practices
necessary to take into account the
Group's legal obligations and the
reasonable
of
shareholders and the responsibility
and accountability of individuals
for reporting and
investigating
reports of unethical practices.
The Code of Conduct is available
on the Group's website.
expectations
The Group does not currently
have a diversity policy.
Once the Group has established
its operations, it will develop a
policy that complements its needs.
The Group does not currently
have a diversity policy.
Once the Group has established
its operations, it will develop a
policy that complements its needs.
None at present.
None at present due to
the size of Group.
The Code of Conduct and the
diversity policy (once established)
will be available on the Group's
Board
review
appropriate
is committed to
prepare
Diversity
and
-
-
-
-
the practices necessary to
maintain confidence in the
company's integrity
the practices necessary to take
into account their legal
obligations and the reasonable
expectations of their
stakeholders
the responsibility and
accountability of individuals
for reporting and investigating
reports of unethical practices
trading in securities of the
Company
Recommendation 3.2: Companies
should establish a policy concerning
diversity and disclose the policy or a
summary of that policy. The policy
should include requirements for the
establish measurable
board
to
objectives
for achieving gender
diversity for the board and to assess
annually both the objectives and
progress in achieving them
Recommendation 3.3: Companies
should disclose
in each annual
report the measurable objectives for
achieving gender diversity set by the
board
the
diversity
progress
and
towards achieving them
Recommendation 3.4: Companies
should disclose
in each annual
report the proportion of women
whole
employees
organisation, women
senior
executive positions and women on
the board
Recommendation 3.5: Companies
should provide
information
indicated in the Guide to reporting
in accordance with
policy
the
the
in
in
For personal use only
23
Compliance
policy.
The Board does not
consider it necessary given
the size of the Group's
current operations.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
MRG policy
ASX Corporate Governance
Council Recommendation
on Principle 3
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1: The board
should establish an audit committee
website.
The Group does not currently
have an audit committee. The
functions of this committee will
be carried out by the whole Board.
The Company Secretary has
significant experience in financial
and accounting matters and will be
for
primarily
monitoring and preparing
the
financial
External
reports.
resources will be commissioned
where necessary.
responsible
Refer to comments in 4.1 above.
Refer to comments in 4.1
above.
Recommendation 4.2: The audit
committee should be structured so
that it:
-
-
-
consists only of non-executive
directors
consists of a majority of
independent directors
is chaired by an independent
chair, who is not chair of the
board
- has at least 3 members
Refer to comments in 4.1 above.
Refer to comments in 4.1 above.
The Group has established a
Continuous Disclosure Policy
which applies to all directors and
senior management.
the
Recommendation 4.3: The audit
committee should have a formal
charter
Recommendation 4.4: Companies
should provide
information
indicated in the Guide to reporting
on Principle 4
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Companies
should establish written policies
designed to ensure compliance with
disclosure
ASX Listing Rule
requirements
ensure
and
accountability at a senior executive
that compliance and
level
disclose those policies or a summary
of those policies
Recommendation 5.2: Companies
information
should provide
indicated in the Guide to reporting
on Principle 5
Principle 6: Respect the rights of shareholders
Recommendation 6.1: Companies
should design a communications
for promoting effective
policy
the
for
to
Group's
The
Continuous
Disclosure Policy will be available
on the Group's website.
The Group is committed to all
shareholders
stakeholders
and
having equal and timely access to
Refer to comments in 4.1
above.
Refer to comments in 4.1
above.
Complies
Complies
Complies
For personal use only
24
MRG policy
Compliance
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
ASX Corporate Governance
Council Recommendation
communication with shareholders
and encouraging their participation
at general meetings and disclose
their policy or a summary of that
policy
Recommendation 6.2: Companies
information
should provide
indicated in the Guide to reporting
on Principle 6
the
Principle 7: Recognise and manage risk
Recommendation 7.1: Companies
should establish policies for the
oversight
and management of
material business risks and disclose
a summary of those policies
to
require management
implement
Recommendation 7.2: The board
should
to
design and
the risk
management and internal control
system to manage the company's
material business risks and report to
it on whether those risks are being
managed effectively. The board
should disclose that management
it as
has reported
the
to
effectiveness of
the company's
management of its material business
risks
Recommendation 7.3: The board
should disclose whether
it has
received assurance from the CEO
and CFO
the declaration
provided in accordance with section
295A of the Corporations Act is
founded on a sound system of risk
management and internal control
and that the system is operating
effectively in all material respects in
relation to financial reporting risks
Recommendation 7.4: Companies
information
should provide
that
the
material information regarding the
the
operations and results of
Group.
Where required, this information
will be provided via the ASX.
information will be
Otherwise,
made available on the Group's
website.
The Group will provide an
explanation of any departures (if
any)
the best practice
recommendations in Principle 6 in
its future annual reports.
from
considers
Given the size of the Group's
current operations, the Board has
formed the view that a separate
risk committee is not necessary.
The Board itself monitors all areas
of operational and financial risk
strategies
and
for
risk management
appropriate
arrangements on an ongoing basis.
If considered necessary, external
input will be sought to assess and
counteract identified risks.
The Board will require that Keith
Weston, as Managing Director and
Chief Executive Officer, design
and implement an appropriate risk
management and internal control
system and provide a report to the
Board at the relevant time.
Complies
Complies
Complies
The Board will seek this assurance
from Keith Weston as Chief
Executive Officer.
Complies
The Group will provide an
explanation of any departures (if
Complies
For personal use only
25
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
ASX Corporate Governance
Council Recommendation
indicated in the Guide to reporting
on Principle 7
MRG policy
Compliance
from
any)
the best practice
recommendations in Principle 7 in
its future annual reports.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: The board
should establish a remuneration
committee
The Group does not currently
have a remuneration committee. .
is responsible for
The Board
recommendations
making
and
director
regarding
management
remuneration
packages.
The Board does not
consider it necessary given
the size of the Group's
current operations
Recommendation
The
remuneration committee should be
structured so that it:
8.2:
-
-
consists of a majority of
independent directors
is chaired by an independent
chair
- has at least three members
clearly distinguish
Recommendation 8.3: Companies
should
the
structure of non-executive directors'
remuneration from that of executive
directors and senior executives
Recommendation 8.4: Companies
should provide
information
indicated in the Guide to reporting
on Principle 8
the
Refer to comments in 8.1 above.
Refer to comments in 8.1
above.
and
reflects
the scope of
The Board is aware of the need to
ensure
remains
remuneration
competitive and consistent with
competitor companies and that
remuneration
the
performance of the Group over
time.
an
The directors performing
executive role are remunerated
their
based on
responsibilities
the
performance of the Group.
Non-executive directors are paid
fees
by
shareholders.
the
The Group will provide
requisite
regarding
disclosure
executive remuneration policies in
its annual report.
The Group will provide an
explanation of any departures (if
any)
the best practice
recommendations in Principle 8 in
its future annual reports.
determined
from
as
Complies
Complies
The Board actively monitors the Group's governance framework, related practices and overall culture.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
26
Statement of Financial Position
As of 30 June 2013
Notes
Consolidated Consolidated
2012
$
2013
$
Assets
Current
Cash and cash equivalents
Other receivables
Total current assets
Non-current
Plant & Equipment
Exploration & Evaluation
Intangibles
Total non-current assets
Total assets
Liabilities
Current
Employee benefits
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Total equity
8
7
12
13
14
10
11
9
3,110,575
116,295
3,226,870
4,362,737
44,436
4,407,173
368
8,665,546
2,043,500
10,709,414
13,936,284
736
2,089,540
-
2,090,276
6,497,449
-
153,317
153,317
153,317
13,782,967
10,062
183,567
193,629
193,629
6,303,820
15,934,536
(2,151,569)
13,782,967
7,384,536
(1,080,716)
6,303,820
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
27
Statement of Profit or Loss and other
Comprehensive Income
for the year ended 30 June 2013
Revenue
Employee benefits expense
Administrative expenses
Exploration expenses
Loss before tax
Tax expense
Loss after tax
Other comprehensive income, net of
tax
Total comprehensive losses
Earnings per share
Basic earnings per share
Earnings from continuing operations
Diluted earnings per share
Earnings from continuing operations
Notes
Consolidated
2013
$
Consolidated
2012
$
5
10
15
17
182,654
(330,231)
(475,854)
(447,422)
(1,070,853)
-
(1,070,853)
-
(1,070,853)
298,117
(317,086)
(376,708)
(368,379)
(764,056)
-
(764,056)
-
(764,056)
Cents
Cents
(1.21)
(1.21)
(0.87)
(0.87)
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
28
Statement of Changes in Equity
for the year ended 30 June 2013
Share
Capital
$
Retained
earnings
$
Total
equity
$
Balance at 30 June 2011
6,545,994
(316,660)
6,229,334
Other Comprehensive Income
Loss after income tax expense for the period
Transactions with owners
Issue of share capital
Less capital raising costs
Total transactions with owners
-
(764,056)
(764,056)
853,080
(14,538)
838,542
-
-
-
853,080
(14,538)
838,542
Balance at 30 June 2012
7,384,536
(1,080,716)
6,303,820
Balance at 30 June 2012
7,384,536
(1,080,716)
6,303,820
Other Comprehensive Income
Loss after income tax expense for the period
-
(1,070,853)
(1,070,853)
Transactions with owners
Issue of share capital
Less capital raising costs
Total transactions with owners
8,550,000
-
8,550,000
-
-
-
8,550,000
-
8,550,000
Balance at 30 June 2013
15,934,536
(2,151,569)
13,782,967
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Statement of Cash Flows
for the year ended 30 June 2013
Operating activities
Interest received
Payments to suppliers and employees
Net cash from continuing operations
Net cash used in operating activities
Investing activities
Payment for plant & equipment
Payment for exploration & evaluation
Net cash used in investing activities
Financing activities
Proceeds from issue of share capital
Capital raising costs
Net cash from financing activities
29
Notes
Consolidated Consolidated
2012
$
2013
$
18
114,279
(871,652)
(757,373)
(757,373)
-
(494,789)
(494,789)
-
-
-
298,117
(643,069)
(344,952)
(344,952)
(1,104)
(874,840)
(875,944)
453,080
(14,538)
438,542
Net change in cash and cash equivalents
(1,252,162)
(782,354)
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
8
4,362,737
3,110,575
5,145,091
4,362,737
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
30
Notes to the consolidated financial statements
Nature of operations
1
The activities of MRG Metals Ltd and its subsidiaries, MRG Metals (Australia) Pty Ltd and MRG Metals
(Exploration) Pty Ltd are exploration and development of gold, base metals and other commodities
within Australia.
General information and statement of compliance
2
The consolidated general purpose financial statements of the Group have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
MRG Metals Ltd is the Group's ultimate parent company. MRG Metals Ltd is a public company
incorporated and domiciled in Australia.
The consolidated financial statements for the year ended 30 June 2013 were approved and authorised for
issue by the board of directors on 30 September 2013 (see note 26).
Changes in accounting policies
Overall considerations
3
3.1
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current
reporting period.
The adoption of these Accounting Standards and Interpretations did not have any impact on the
financial performance or position of the Group.
3.2
New Accounting Standards and Interpretations not yet mandatory or early
adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective.
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
Expected to be initially
applied in the financial
year ending
AASB 9 Financial Instruments
(December 2010)
AASB 10 Consolidated Financial
Statements
AASB 11 Joint Arrangements
AASB 12 Disclosure of
Interests in Other Entities
AASB 127 Separate Financial
Statements
AASB 13 Fair Value
Measurement
1 January 2015
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
30 June 2016
30 June 2014
30 June 2014
30 June 2014
30 June 2014
30 June 2014
For personal use only
31
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
AASB 1053 Application of Tiers
of Australian Accounting
Standards
AASB 2010 – 2 Amendments to
Australian Accounting Standards
arising from Reduced Disclosure
Requirements
AASB 2011 – 4 Amendments to
Australian Accounting Standards
to Remove Individual Key
Management Personnel
Disclosure Requirements
AASB 2011 – 7 Amendments to
Australian Accounting Standards
arising from the Consolidation
and Joint Arrangements
Standards
AASB 119 Employee Benefits
(September 2011)
AASB Interpretation 20
Stripping Costs in the Production
Phase of
Surface Mining
AASB 2012 – 2 Amendments to
Australian Accounting Standards
– Disclosures – Offsetting
Financial
Assets and Financial Liabilities
AASB 2012 – 3 Amendments to
Australian Accounting Standards
–
Offsetting Financial Assets and
Financial Liabilities
AASB 2012 – 4 Amendments to
Australian Accounting Standards
– Government Loans
AASB 2012 – 5 Amendments to
Australian Accounting Standards
arising from Annual
Improvements
2009 – 2011 Cycle
AASB 2012 - 6 Amendments to
Australian Accounting Standards
–Mandatory Effective Date of
AASB 9 and Transition
Disclosures
AASB 2012 - 9 Amendment to
AASB 1048 arising from the
Withdrawal of Australian
Interpretation 1039
1 July 2013
30 June 2014
1 July 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
1 January 2013
30 June 2014
30 June 2014
1 January 2013
30 June 2014
1 January 2014
30 June 2015
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
32
Summary of accounting policies
Overall considerations
4
4.1
The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarised below.
The consolidated financial statements have been prepared using the measurement bases specified by
Australian Accounting Standards for each type of asset, liability, income and expense. The measurement
bases are more fully described in the accounting policies below.
Presentation of financial statements
4.2
AASB 101 requires two comparative periods to be presented for the statement of financial position in
certain circumstances.
Basis of consolidation
4.3
The Group financial statements consolidate those of the parent company and its subsidiary undertakings
drawn up to 30 June 2013. Subsidiaries are all entities over which the Group has the power to control
the financial and operating policies. The Group obtains and exercises control through more than half of
the voting rights. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year
are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
Segment reporting
4.4
Operating segments are presented using the „management approach‟, where information is presented on
the same basis as the internal reports provided to chief operating decision makers, being the Board of
Directors. The Board of Directors are responsible for the allocation of resource to operating segments
and assessing their performance.
Revenue
4.5
Interest income is recognised on an accrual basis using the effective interest method.
Operating expenses
4.6
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their
origin.
Exploration and evaluation
4.7
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
33
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the
year in which the decision to abandon the area is made.
A regular review for impairment is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
Income taxes
4.8
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not
recognised in other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods, that
are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or
loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on
the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with investments in subsidiaries and joint ventures is not provided if reversal of
these temporary differences can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to
apply to their respective period of realisation, provided they are enacted or substantively enacted by the
end of the reporting period. Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised
against future taxable income.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in
profit or loss, except where they relate to items that are recognised in other comprehensive income (such
as the revaluation of land) or directly in equity, in which case the related deferred tax is also recognised
in other comprehensive income or equity, respectively.
Cash and cash equivalents
4.9
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject
to an insignificant risk of changes in value.
Other Receivables
4.10
Other receivables are recognised at amortised cost, less any impairment.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
34
Trade Payables
4.11
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period and which are unpaid. Due to their short term nature they are measured at amortised
cost and not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Earnings per share
4.12
Basic earnings per share is calculated by dividing the profit attributable to the owners of MRG Metals
Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary
shares issued during the financial period.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
Equity
4.13
Share capital represents the nominal value of shares that have been issued. Any transaction costs
associated with the issuing of shares are deducted from share capital, net of any related income tax
benefits.
Retained earnings include all current and prior period retained profits.
4.14
Post employment benefits and short-term employee benefits
The Group provides post employment benefits through various defined contribution plans.
A defined contribution plan is a superannuation plan under which the Group pays fixed contributions
into an independent entity. The Group has no legal or constructive obligations to pay further
contributions after its payment of the fixed contribution. The Group contributes to several plans and
insurances for individual employees that are considered defined contribution plans. Contributions to the
plans are recognised as an expense in the period that relevant employee services are received.
Short-term employee benefits, including annual leave entitlement, are current liabilities included in
„employee benefits‟, measured at the undiscounted amount that the Group expects to pay as a result of
the unused entitlement.
Provisions, contingent liabilities and contingent assets
4.15
Provisions are recognised when present obligations as a result of a past event will probably lead to an
outflow of economic resources from the Group and amounts can be estimated reliably. Timing or
amount of the outflow may still be uncertain. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on
the most reliable evidence available at the reporting date, including the risks and uncertainties associated
with the present obligation. Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class of obligations as a whole.
Provisions are discounted to their present values, where the time value of money is material.
All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
35
Possible inflows of economic benefits to the Group that do not yet meet the recognition criteria of an
asset are considered contingent assets.
Goods and Services Tax (GST)
4.16
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
4.17
Significant management judgement in applying accounting policies
The following are significant management judgements in applying the accounting policies of the Group
that have the most significant effect on the financial statements.
Deferred tax assets
The assessment of the probability of future taxable income in which deferred tax assets can be utilised is
based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable
income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the
numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a
positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it
can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition
of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed
individually by management based on the specific facts and circumstances.
Estimation uncertainty
When preparing the financial statements management undertakes a number of judgements, estimates
and assumptions about recognition and measurement of assets, liabilities, income and expenses.
The actual results may differ from the judgements, estimates and assumptions made by management,
and will seldom equal the estimated results.
Information about significant judgements, estimates and assumptions that have the most significant
effect on recognition and measurement of assets, liabilities, income and expenses is provided below.
Exploration and evaluation assets
At each reporting date, the directors review the carrying amount of each area of interest, with reference
to the indicators of impairment outlined in AASB 6 Exploration for and Evaluation of Mineral
Resources. No indicators of impairment were noted in the current period.
Tax Losses
The Group has not recognised a deferred tax asset with regard to unused tax losses and other temporary
differences, as it has not been determined whether the Company will generate sufficient taxable income
against which the unused tax losses and other temporary differences can be utilised in the foreseeable
future.
Share based payments
The Group measures the cost of share based payments at fair value at the issue date.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
36
4.18 Other intangible assets
Recognition of other intangible assets
Acquired intangible assets
The acquired Technical Services Agreement is capitalised on the basis of the costs incurred to acquire.
Subsequent measurement
All intangible assets, including the acquired Technical Services Agreement, are accounted for using the
cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful
lives, as these assets are considered finite. Residual values and useful lives are reviewed at each reporting
date. In addition, they are subject to impairment testing as described in Note 4.19. The following useful
lives are applied:
Technical Services Agreement – 2 years
Amortisation has been included within depreciation, amortisation and impairment of non-financial
assets.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference
between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within
other income or other expenses.
4.19 Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for
impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-
generating units that are expected to benefit from synergies of the related business combination and
represent the lowest level within the Group at which management monitors goodwill.
All individual assets or cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset‟s or cash-generating unit's carrying
amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-
use. To determine the value-in-use, management estimates expected future cash flows from each cash-
generating unit and determines a suitable interest rate in order to calculate the present value of those
cash flows. The data used for impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset
enhancements. Discount factors are determined individually for each cash-generating unit and reflect
management‟s assessment of respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to
that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the
cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised may no longer exist. An impairment charge is
reversed if the cash-generating unit‟s recoverable amount exceeds its carrying amount.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
5
Revenue
Interest
6
Segment reporting
37
Consolidated
2013
$
182,654
182,654
Consolidated
2012
$
298,117
298,117
The Group is organised into one operating segment, which is the exploration and development of Gold,
base metals and other commodities within Australia. This operating segment is based on the internal
reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers) in assessing performance and in determining the allocation of resources.
7
Other receivables
GST receivables
Accrued Interest
Prepayments
Other receivables
The receivables noted above are not impaired nor past due.
8
Cash and cash equivalents
Cash and cash equivalents include the following components:
Cash at bank and in hand:
- AUD
Short term deposits (AUD)
Cash and cash equivalents
Consolidated
2013
$
35,195
68,375
12,725
116,295
Consolidated
2012
$
44,436
-
-
44,436
Consolidated
2013
$
Consolidated
2012
$
44,603
3,065,972
3,110,575
3,552,737
810,000
4,362,737
The effective interest rate on short-term bank deposits is 4.70%; these deposits have an average maturity
of 180 days.
For personal use only
38
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
9
9.1
Equity
Share capital
The share capital of MRG Metals Ltd consists of fully paid ordinary shares and options, the shares do
not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and
represent one vote at the shareholders' meeting of MRG Metals Ltd.
Date Issued
Details
4 July 2011
26 July 2011
9 November 2011
SHARES
Total at 30 June 2011
Shares issued and fully paid:
Issued to Tenement Vendors at $0.20
Issued to Tenement Vendors at $0.20
Issued from options conversion at $0.25
Total issued shares at 30 June 2012
OPTIONS
Total at 30 June 2011
Options issued:
28 September 2011 Issued to public at $0.01
9 November 2011 Options conversion
Total issued options at 30 June 2012
Less costs of capital raising for above items
Total issued options at 30 June 2012
SHARE CAPITAL
Date Issued
Details
28 June 2013
SHARES
Total at 30 June 2012
Shares issued and fully paid:
Issued to Sasak Resources Vendors
Total share capital at 30 June 2013
OPTIONS
Total at 30 June 2012
Options issued:
Total issued options at 30 June 2013
SHARE CAPITAL
Consolidated
2012
$
Quantity
86,116,000
6,545,994
1,000,000
1,000,000
50,000
88,166,000
200,000
200,000
12,500
6,958,494
-
-
44,057,993
(50,000)
44,007,993
44,007,993
440,580
-
440,580
(14,538)
426,042
7,384,536
Consolidated
2013
$
Quantity
88,166,000
6,958,494
45,000,000
133,166,000
8,550,000
15,508,494
44,007,993
-
44,007,993
426,042
-
426,042
15,934,536
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
39
Dividends
9.2
No dividends were declared or paid during the year. There are no franking credits outstanding at period
end.
Employee remuneration
Employee benefits expense
10
10.1
Expenses recognised for employee benefits are analysed below:
SU
Salaries and fees
Defined Contribution Superannuation
Employee benefits expense
Consolidated
2013
$
303,112
27,119
330,231
Consolidated
2012
$
291,346
25,740
317,086
Employee benefits
10.2
The liabilities recognised for employee benefits in the statement of financial position consist of the
following amounts:
Current:
- Other short term employee obligations
Consolidated
2013
$
Consolidated
2012
$
-
-
10,062
10,062
The current portion of these liabilities represents the Group‟s obligations to its current employees that
are expected to be settled during 2013. Other short-term employee obligations arise from accrued annual
leave entitlement at the reporting date.
Trade and other payables
11
Trade and other payables recognised in the statement of financial position can be analysed
as follows:
Current
- Trade payables
- Tenement acquisition payable
- Other payables and accrued expenses
12
Plant and equipment
Plant & Equipment
Accumulated Depreciation
Consolidated
2013
$
49,797
50,000
53,520
153,317
Consolidated
2012
$
139,941
-
43,626
183,567
Consolidated
2013
$
1,104
(736)
368
Consolidated
2012
$
1,104
(368)
736
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
13
Exploration and evaluation assets
Cost as at 30 June 2011
Additions:
Kalgoorlie East - tenement acquisition costs
Collie South - tenement acquisition costs
Fraser Range - tenement acquisition costs
Other exploration costs
Disposals:
Mulgul
Diorite/Bellchambers
Braemore Battery
Cost as at 30 June 2012
Cost as at 30 June 2012
Additions:
Kalgoorlie East - tenement acquisition costs
Collie South - tenement acquisition costs
Sasak Resources – tenement acquisition costs
Fraser Range - tenement acquisition costs
Other exploration costs
Disposals:
Collie South
Cost as at 30 June 2013
40
Consolidated
2012
$
1,146,623
220,000
250,000
13,700
791,140
(22,435)
(65,513)
(243,975)
2,089,540
Consolidated
2013
$
2,089,540
57,148
75,000
6,506,500
7,205
405,436
(475,283)
8,665,546
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on
successful development and commercial exploitation, or alternatively, sale of the respective areas of
interest.
Intangibles
14
The acquisition of Sasak Resources required the issue of 45,000,000 ordinary shares. The market value
of the shares at 26 June 2013, being date transaction was approved at a General Meeting, was $0.19.
Hence, total consideration was $8,550,000. The value per the Independent Geologist Report for the
tenements acquired was $6,506,500. The balance of consideration of $2,043,500 was attributed to the
access to the data mining software of Sasak Technical.
Intangibles
Consolidated
2013
$
2,043,500
2,043,500
Consolidated
2012
$
-
-
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
41
Income tax expense
15
The relationship between the expected tax expense based on the tax rate of MRG Metals Ltd and the
reported tax expense in profit or loss can be reconciled as follows, also showing major components of
tax expenses:
Profit/(loss) before tax
Expected tax expense/(benefit) @ 30%
Adjustment for non-deductible expenses:
- Movement in accruals
- Movement in provisions
-
Incorporation expenses
- Exploration and evaluation expenses
Adjustment for non-assessable income:
- Movement in other receivables
Current period tax loss not recognised
Deferred tax expense:
- Temporary differences
- Unused tax losses
Deferred tax assets not recognised
Consolidated
2013
$
(1,070,853)
(321,256)
Consolidated
2012
$
(764,056)
(229,217)
5,256
(3,019)
-
(102,811)
(20,512)
(442,342)
442,342
(121,086)
442,342
321,256
-
1,603
(338)
(210,473)
-
(438,425)
438,425
(209,208)
438,425
229,217
The above potential tax benefit has not be recognised as the recovery is uncertain.
The carry forward tax loss at 30 June 2013 was $3,235,300.
The taxation benefit of tax losses and temporary differences not brought to account will only be
obtained if:
-
the Group derives future assessable income of a nature and an amount sufficient to enable the
benefit from the deductions for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no change in tax legislation adversely affects the Group in realising the benefits from deducting
the tax losses.
-
-
16
Auditor remuneration
Audit services
Auditors of MRG Metals Ltd – Grant Thornton
- Audit of the financial report
Audit services remuneration
Other services
Total other service remuneration
Total Auditor’s remuneration
Consolidated
2013
$
Consolidated
2012
$
39,500
39,500
-
39,500
34,000
34,000
-
34,000
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Earnings per share
17
The weighted average number of shares for the purposes of diluted earnings per share can be
reconciled to the weighted average number of ordinary shares used in the calculation of basic
earnings per share as follows:
42
Loss after income tax
Weighted average number of shares used in basic earnings per share
Weighted average number of shares used in diluted earnings per share
Earnings Per Share
Diluted Earnings Per Share
Consolidated
2013
$
(1,070,853)
88,535,863
88,535,863
Consolidated
2012
$
(764,056)
88,071,601
88,071,601
(1.21) cents
(1.21) cents
(0.87) cents
(0.87) cents
The rights to options held by option holders have not been included in the weighted average number of
ordinary shares for the purposes of calculating diluted EPS as they do not meet the requirements for the
inclusion in AASB 133 “Earnings per Share”. The rights to options are non-dilutive as the Group is loss
generating.
18
Reconciliation of cash flows from operating activities
Consolidated
2013
$
Consolidated
2012
$
(1,070,853)
(764,056)
368
304,889
(10,062)
(59,134)
(12,725)
90,144
(757,373)
368
331,923
5,345
5,268
42,666
33,534
(344,952)
Cash flows from operating activities
Loss after income tax expense for the year
Cash flows excluded from loss attributable to operating activities
Non cash flows in loss:
Depreciation
Write off deferred exploration and evaluation expenditure
Change in other employee obligations
Change in other assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets and prepayments
(Increase)/decrease trade and other payables
Net cash from operating activities
Related party transactions
19
The Parent entity is MRG Metals Ltd.
MRG Metals Ltd owns 100% of the shares of MRG Metals (Australia) Pty Ltd.
MRG Metals Ltd owns 100% of the shares of MRG Metals (Exploration) Pty Ltd.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
43
MRG Metals (Australia) Pty Ltd and MRG (Exploration) own the mining tenements and have no other
Assets or Liabilities.
The Group's related parties include its key management and others as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.
Transactions with related parties
19.1
The following transactions occurred with related parties:
Payment for goods and services:
The Company has entered into an agreement with Calatos Pty Ltd in relation to consulting fees for
services relating to marketing, dealing with shareholders and capital raising. The fees payable are
$120,000 per annum. At the time of entering into the agreement, Mr Bruce McFarlane, a shareholder of
Calatos Pty Ltd, held a controlling interest in MRG Metals Ltd.
The Group used the accounting services of RSM Bird Cameron, an entity associated with Mr. Turner.
The amounts billed were based on normal market rates and amounted to $40,800 (2012 $31,500).
Receivable from and payable to related parties
There were no trade receivable from or trade payables to related parties.
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
Terms and conditions
All transactions are made on normal commercial terms and conditions and at market rates.
19.2 Transactions with key management personnel
Key management of the Group are the Board of Directors. Key management personnel remuneration is
set out in the Remuneration Report in the Director‟s Report.
Equity instruments held by KMP
19.3
The number of shares in the Company by each of the key management personnel of the Group,
including their related parties are set out below:
Year ended 30 June 2012
Van Der Zwan
Pietrzak
Turner
Balance at
start of
year
2,160,000
2,130,000
1,470,000
5,760,000
Received
on
exercise
Other
changes
Additions
Held at
the end of
the
reporting
period
-
-
-
-
-
-
-
-
-
-
-
-
2,160,000
2,130,000
1,470,000
5,760,000
For personal use only
44
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Year ended 30 June 2013
Weston
Van Der Zwan
Pietrzak
Turner
Balance at
start of
year
-
2,160,000
2,130,000
1,470,000
5,760,000
Received
on
exercise
Other
changes
-
-
-
-
-
-
-
-
-
-
Additions
100,000
120,000
50,000
61,600
331,600
Held at
the end of
the
reporting
period
100,000
2,280,000
2,180,000
1,531,600
6,091,600
The number of options in the Company by each of the key management personnel of the Group,
including their related parties are set out below:
Year ended 30 June 2012
Van Der Zwan
Pietrzak
Turner
Year ended 30 June 2013
Weston
Van Der Zwan
Pietrzak
Turner
Balance at
start of
year
-
-
-
-
Balance at
start of
year
-
1,080,000
1,065,000
735,000
2,880,000
Deleted
on
exercise
Other
changes
Held at
the end of
the
reporting
period
-
-
-
-
-
-
-
-
1,080,000
1,065,000
735,000
2,880,000
Additions
1,080,000
1,065,000
735,000
2,880,000
Deleted
on
exercise
Other
changes
Additions
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Held at
the end of
the
reporting
period
-
1,080,000
1,065,000
735,000
2,880,000
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
45
Contingent assets and contingent liabilities
20
The Group has no contingent assets as 30 June 2013.
With reference to Note 14, the Group has identified potential stamp duty implications associated with
the acquisition of Sasak Resources. The Group has made a submission to the WA Office of State
Revenue to determine whether any stamp duty is payable on the acquisition of Sasak Resources WA
tenements. An assessment is yet to be received in relation to this transaction. However, the Directors
estimate that if stamp duty is assessable, the liability will approximate $300,000.
21
Commitments for expenditure
Exploration and evaluation:
Within 12 months
2013
$
1,046,880
1,046,880
2012
$
344,000
344,000
Exploration and evaluation:
In order to maintain current rights of tenure to exploration tenements, the Group is required to outlay
rentals and to meet the minimum expenditure requirements of the State Mine Departments. Minimum
expenditure commitments may be subject to renegotiation and with approval may otherwise be avoided
by sale, farm out or relinquishment. These obligations are not provided in the accounts and are payable.
22
Financial instrument risk
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The main types of risks are
market risk (including interest rate risk), credit risk and liquidity risk.
The Group's risk management is carried out by the board of directors, and focuses on actively securing
the Group's short to medium-term cash flows by minimising the exposure to financial markets.
The Group does not engage in the trading of financial assets for speculative purposes nor does it write
options. The most significant financial risks to which the Group is exposed are described below.
Foreign currency sensitivity
22.1
To date, all of the Group's transactions have been carried out in Australian Dollars.
Interest rate sensitivity
22.2
The Group's only exposure to interest rate risk is in relation to deposits held. Deposits are held with
reputable banking financial institutions.
At 30 June 2013, there was $3,000,000 on deposit at 4.70% and $65,972 on deposit at 4.60% (Note 8).
An increase/decrease by 30% or 1.41 basis points would have a favourable/adverse effect on profit for
the year of $43,230. The percentage change is based on the expected volatility of interest rates using
market data and analysts‟ forecasts.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
46
Credit risk analysis
22.3
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is
exposed to minimal credit risk as its only exposure is to interest receivable and GST refunds.
Liquidity risk analysis
22.4
Liquidity risk is that the Group might be unable to meet its obligations. The Group manages its liquidity
needs by monitoring actual and forecast cash inflows and outflows due in day-to-day business.
The Group's working capital, being current assets less current liabilities, at 30 June 2013 was $3,123,553.
Based on this, the directors are satisfied the Group will have sufficient funds to pay its debts as and
when they fall due.
As at 30 June, the Group's non-derivative financial liabilities have contractual maturities (including
interest payments where applicable) as summarised below:
30 June 2012
Trade and other payables
Total
30 June 2013
Trade and other payables
Total
Current
Non current
Within 6
months
$
183,567
183,567
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
Within 6
months
$
103,317
103,317
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying
values of the liabilities at the reporting date. Unless otherwise stated, the carrying amounts of financial
instruments reflect their fair values due to their short term nature.
Capital risk management
23
The Group‟s objectives when managing capital is to ensure the Group's ability to continue as a going
concern so that it can provide an adequate return to shareholders.
The Group would look to raise capital when an opportunity to invest in a business, company or tenement is
seen as value adding.
Post-reporting date events
24
Since the end of the year the following significant events have occurred:
There are no other events occurring since the end of the year that have, or may, significantly affect the
Group‟s operations, results of those operations or the state of affairs of the Group.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Parent entity information
25
Information relating to MRG Metals Ltd („the parent entity‟)
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Statement of comprehensive income
Profit/(loss) for the period
Total comprehensive income
47
2013
$
2012
$
3,226,870
13,936,284
153,317
153,317
4,407,173
6,497,449
193,629
193,629
15,934,536
(2,151,569)
13,782,967
7,384,536
(1,080,716)
6,303,820
(1,070,853)
(1,070,853)
(764,056)
(764,056)
26
Authorisation of financial statements
The consolidated financial statements for the year ended 30 June 2013 were approved by the board of
directors on 30 September 2013.
Albert Pietrzak
Chairman
Shane Turner
Director/Secretary)
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Directors‟ declaration
48
1. In the opinion of the directors of MRG Metals Ltd:
a
the consolidated financial statements and notes of MRG Metals Ltd are in accordance with the
Corporations Act 2001, including
i.
giving a true and fair view of its financial position as at 30 June 2013 and of its performance for
the financial period ended on that date; and
ii.
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b there are reasonable grounds to believe that MRG Metals Ltd will be able to pay its debts as
and when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the chief executive officer and chief financial officer for the financial period ended 30 June
2013.
3. The consolidated financial statements comply with International Financial
Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne, the 30th day of September 2013
_______________________Albert Pietrzak
Director
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
49
Grant Thornton Audit Pty Ltd
ACN 130 913 594
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of MRG Metals Limited
Report on the financial report
We have audited the accompanying financial report of MRG Metals Limited (the “Entity”), which
comprises the consolidated statement of financial position as at 30 June 2013, the consolidated
statement of profit and loss statement and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a
summary of significant accounting policies and other explanatory information and the directors‟
declaration of the consolidated entity comprising the Entity and the entities it controlled at the year‟s
end or from time to time during the financial year.
Directors’ responsibility for the financial report
The Directors of the Entity are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 The
Directors‟ responsibility also includes such internal control as the Directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial
report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the
financial statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require us to comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor‟s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Entity‟s
preparation of the financial report that gives a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Entity‟s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Directors, as well
as evaluating the overall presentation of the financial report.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
50
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Electronic presentation of audited financial report
This auditor‟s report relates to the financial report of MRG Metals Limited and controlled entities for
the year ended 30 June 2013 included on MRG Metals Limited‟s web site. The Entity‟s Directors are
responsible for the integrity of MRG Metals Limited‟s web site. We have not been engaged to report on
the integrity of MRG Metals Limited‟s web site. The auditor‟s report refers only to the statements named
above. It does not provide an opinion on any other information which may have been hyperlinked
to/from these statements. If users of this report are concerned with the inherent risks arising from
electronic data communications they are advised to refer to the hard copy of the audited financial report
to confirm the information included in the audited financial report presented on this web site.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
Auditor’s opinion
In our opinion:
a
the financial report of MRG Metals Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the consolidated entity‟s financial position as at 30 June 2013
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b
the financial report also complies with International Financial Reporting Standards as disclosed in
the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in pages 16 to 18 of the directors‟ report for the year
ended 30 June 2013. The Directors of the Entity are responsible for the preparation and presentation of
the remuneration report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the remuneration report, based on our audit conducted in
accordance with Australian Auditing Standards.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
51
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of MRG Metals Limited for the year ended 30 June 2013,
complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Brad Taylor
Partner - Audit & Assurance
Melbourne, 30 September 2013
In our opinion, the remuneration report of MRG Metals Limited for the year ended 30 June 2013,
complies with section 300A of the Corporations Act 2001.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant
Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered
by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context
only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton
Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
52
ASX Additional Information
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this
report is set out below. The information is effective as at 18 September 2013.
Substantial Shareholders
The number of substantial shareholders and their associates are set out below:
Shareholder
Ottawa Resources P/L
Lograr Investments P/L
El Gaia Holdings P/L
Jolanza P/L
Julian Bavin Holdings P/L
Number of Shares
13,007,000
12,249,900
12,249,900
12,249,900
8,250,300
Voting Rights
Ordinary shares
Options
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
On show of hands, every member present at a
meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote
No voting rights
Shareholders
5
22
94
149
115
385
There were 9 holders of less than a marketable parcel of ordinary shares.
Twenty largest quoted shareholders
Ottawa Resources P/L
J Powell
Bigson P/L
G & C Hedt P/L
Gulf Country Investments P/L
B McFarlane & J Charlwood
Lifestyle Connections P/L
L, H & T Knight
Minico P/L
M Bolton
K Van Der Zwan
N Fammartino
HSBC Custody Nominees (Australia) Ltd
UBS Wealth Management Australia Nominees P/L
TRR Investments P/L
Tigerland Investments P/L
RL Staggard & DL Berry
Ordinary Shares
Number Held %of quoted shares
12.21
3.52
2.90
2.62
2.55
2.54
2.38
2.35
2.27
2.27
2.19
2.00
1.86
1.74
1.60
1.59
1.57
10,764,000
3,100,000
2,560,000
2,310,000
2,250,000
2,243,000
2,100,000
2,070,000
2,000,000
2,000,000
1,930,000
1,760,000
1,639,500
1,534,000
1,410,000
1,400,000
1,380,000
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53
1,380,000
1,280,000
1,280,000
46,390,500
1.57
1.45
1.45
52.62
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Rylet P/L
33rd Infinity P/L
S Popovic
Restricted equity securities
The following securities are subject to escrow:
-
-
-
15,000,000
15,000,000
15,000,000
Escrowed until 28 June 2014
Escrowed until 28 June 2015
Escrowed until 28 June 2016
Securities exchange
The Company is listed on the Australian Securities Exchange and shares are quoted under the code
MRQ.
Options
Twenty largest quoted optionholders
Number Held
Ottawa Resources P/L
J Powell
G & C Hedt P/L
Gulf Country Investments P/L
HSBC Custody Nominees (Australia) Ltd
RL Staggard & DL Berry
Life-Style Connections P/L
L, H & T Knight
Minico P/L
K Van Der Zwan
Rylet P/L
N Fammartino
Bigson P/L
Tigerland Investments P/L
Sage Administration P/L
TRR Investments P/L
A & J Turner P/L
33rd Infinity P/L
S Popovic
Notemarl P/L
Securities exchange
5,392,000
1,404,500
1,280,000
1,200,000
1,154,750
1,150,000
1,050,000
1,035,000
1,000,000
965,000
940,000
880,000
880,000
700,000
695,000
690,000
640,000
640,000
640,000
640,000
22,976,250
%of quoted
options
12.25
3.19
2.91
2.73
2.62
2.61
2.39
2.35
2.27
2.19
2.14
2.00
2.00
1.59
1.58
1.57
1.45
1.45
1.45
1.45
52.21
The Company is listed on the Australian Securities Exchange and options are quoted under the code
MRQO.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Tenements
The Tenements held by the Company at reporting date are as follows:
54
Project
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Collie South
Braemore
Braemore
Braemore
Braemore
Braemore
Braemore
Braemore
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
Tenement
% Owned
P52/1366
P52/1367
P52/1368
P52/1369
P52/1372
P52/1373
P52/1374
P52/1375
P52/1376
P52/1377
P52/1378
P52/1379
P52/1380
P52/1381
P26/3693
P26/3694
P26/3596
P26/3597
P26/3598
P26/3599
P26/3600
P26/3601
P26/3602
P26/3603
P26/3604
P26/3605
P26/3606
P25/1984
P25/1985
E70/3331
P37/7765
P37/7766
P37/7767
P37/7768
P37/7769
P37/7770
P37/7771
E38/2541
E38/2543
E38/2544
E38/2547
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
30
100
100
100
100
100
100
100
100
100
100
100
For personal use only
55
100
100
100
100
100
100
100
100
100
100
100
100
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
East Yilgarn
Davenport Downs
E38/2548
E38/2549
E38/2550
E38/2551
E38/2553
E38/2555
E38/2556
E38/2557
E38/2561
E38/2773
E38/1616
EPM19306
Corporate Directory
Directors & Secretary
Albert Pietrzak
Non Executive Chairman
Keith Weston
Managing Director and Chief Executive Officer
Andrew Van Der Zwan
Non Executive Director
Christopher Gregory
Non Executive Director
Shane Turner
Non Executive Director and Company Secretary
Principal place of business
Level 8, 350 Collins Street, Melbourne VIC 3000
Telephone: +61 3 9642 8575
Email: info@mrgmetals.com.au
www.mrgmetals.com.au
Fax: +61 3 96425662
Registered office
Level 1, 1-3 Bath Lane, Ballarat Victoria 3350
PO Box 237, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667
Corporate accountant and Registered ASIC Agent
RSM Bird Cameron
Level 1, 1-3 Bath Lane, Ballarat VIC 3350
PO Box 685, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667
www.rsmi.com.au
For personal use only
56
MRG Metals Ltd
Consolidated Financial Statements
30 June 2013
Solicitors
K & L Gates
Level 25, 525 Collins Street, Melbourne VIC 3000
Telephone: +61 3 9205 2000 Fax: +61 3 9205 2055
www.klgates.com
Share Registry
Link Market Services Limited
Ground Floor, 178 St Georges Terrace, Perth WA 6000
Telephone: 1300 554 474
Auditor
Grant Thornton Audit Pty Ltd
Level 30, 525 Collins Street, Melbourne Vic 3000
Telephone (office): +61 3 8663 6000 Fax: +61 3 8663 6333
Email: brad.taylor@au.gt.com
Website: www.grantthornton.com.au
Stock Exchange Listing
ASX Codes: MRQ , MRQO
For personal use only